[Federal Register Volume 63, Number 127 (Thursday, July 2, 1998)]
[Rules and Regulations]
[Page 36191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17830]



[[Page 36191]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CC Docket No. 96-128; DA 98-1198]


Pay Telephone Reclassification and Compensation Provisions of the 
Telecommunciations Act of 1996

AGENCY: Federal Communications Commission.

ACTION: Request for comments pursuant to court decision.

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SUMMARY: This document seeks further comment on certain issues raised 
by the May 15, 1998 decision of the United States Court of Appeals for 
the District of Columbia Circuit in MCI Telecommunications Corporation, 
et al. v. FCC. The Court of Appeals decision related to the 
Commission's Second Report and Order on pay telephone reclassification 
and compensation provisions.

DATES: Comments are due on or before July 13, 1998, and reply comments 
are due on or before July 27, 1998.

ADDRESSES: Federal Communications Commission, Room 222 , 1919 M St., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Greg Lipscomb, Formal Complaints and 
Information Branch, Enforcement Division, Common Carrier Bureau. 
(202)418-0960.

SUPPLEMENTARY INFORMATION: In MCI Telecommunications Corporation, et 
al. v. FCC (``MCI v. FCC''),<SUP>1</SUP> the court held that the 
Commission failed to explain, in its Second Order,<SUP>2</SUP> 
published on October 30, 1997, at 62 FR 58659, why a market-based rate 
for coinless calls could be derived by subtracting avoided costs from a 
market rate charged for coin calls.<SUP>3</SUP> In light of the court's 
decision in MCI v. FCC, we seek comment on competition in the payphone 
market since the deregulation of payphones and the impact of 
deregulation on the local coin rate. To that end, we seek comment and 
evidence on whether the local coin rate reflects competitive market 
conditions and the extent to which costs and rates converge in the coin 
call market. We also seek comment on the similarities and differences 
between the market segments for coin and coinless calls and the factors 
attributable to these similarities and differences, including the use 
of payphones to initiate both types of calls. We further seek comment 
on whether, and how, the distinctions between these market segments 
should affect the determination of a reasonable default compensation 
amount for coinless calls. Parties should address any market 
imperfections that might affect the use of the local coin rate as a 
market-based surrogate for coinless calls, including locational 
monopolies, and limitations on the use of pennies in payphones.
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    \1\ MCI v. FCC, No. 97-1675, slip op. (D.C. Cir. May 15, 1998).
    \2\ Implementation of Pay Telephone Reclassification and 
Compensation Provisions of the Telecommunications Act of 1996, 
Second Report and Order, CC Docket No. 96-128, 62 FR 58659 (October 
30, 1997), 13 FCC Rcd 1778 (1997) (``Second Order'').
    \3\ MCI v. FCC, slip op. at 5.
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    The Second Order concluded that coin and coinless calls share 
certain joint and common costs, because each type of call generally 
uses the same piece of equipment. Therefore, we seek comment on the 
reasonableness of adjusting the local coin rate for cost differences 
between providing coin and coinless calls as a market-based mechanism 
for deriving fair compensation for coinless calls. We ask that parties 
respond specifically to the concerns raised by the court in 
establishing the appropriate per-call compensation amount using this 
approach. We also seek comment on other market-based methodologies that 
could be used to establish a per-call compensation rate for coinless 
calls. In suggesting alternative market approaches, parties should 
address, for example, how a payphone service provider would use the 
market-based approach to set a price for coinless calls in a 
deregulated market when providing a number of related types of services 
using substantially the same payphone equipment.
    We will incorporate in this proceeding the comments and reply 
comments filed in the Second Order proceeding and in response to 
petitions for reconsideration of the Second Order. Parties may also 
file additional information regarding specific payphone costs for 
providing coinless calls and the differences in costs for providing 
coin calls.
    Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments with the Office of the Secretary, Federal 
Communications Commission, Room 222, 1919 M St. NW, Washington, DC 
20554 on or before July 13, 1998, and reply comments on or before July 
27, 1998. To file formally in this proceeding, participants must file 
an original and four copies of all comments, reply comments, and 
supporting comments. In addition, parties should file two copies of any 
such pleadings with the Chief, Enforcement Division, Common Carrier 
Bureau, Stop 1600A, Room 6008, 2025 M Street, NW, Washington, DC 20554. 
Parties should also file one copy of any documents filed in this docket 
with the Commission's copy contractor, International Transcription 
Services, Inc., 1231 20th Street, NW, Washington, DC 20036. Comments 
and reply comments will be available for public inspection during 
regular business hours in the FCC Reference Center (Room 239), 1919 M 
Street, NW, Washington, DC.
Federal Communications Commission.
Kathryn C. Brown,
 Chief, Common Carrier Bureau.
[FR Doc. 98-17830 Filed 7-1-98; 8:45 am]
BILLING CODE 6712-01-P